CINCINNATI — The FBI agent who oversaw the largest public corruption case in Ohio history said a tip from an unnamed “concerned individual,” led him to open an investigation that eventually led to the arrest of former Ohio House Speaker Larry Householder and four others.
FBI case agent Blane Wetzel testified on Tuesday about how the agency painstakingly built this historic case with 250 subpoenas, many for bank and phone records, and pouring over the tens of thousands of pages of documents they got back, like “peeling the onion back one layer at a time.”
Those records detail steakhouse dinner reservations, private jet trips to the 2017 presidential inauguration, and emails between Householder and his associates and the Akron-based FirstEnergy Corp. that prosecutors say were all part of a complex scheme to trade power for money.
Householder and former GOP chair Matt Borges are facing a jury trial together, both accused of racketeering conspiracy, a charge more often associated with organized crime bosses than elected leaders and lobbyists.
Both have maintained their innocence. They face as much as 20 years in prison if convicted.
“I think the fact that he’s being prosecuted is going to make many elected officials want to be a little more careful with compliance,” said Northern Kentucky University law professor Ken Katkin, who attended the trial on Tuesday. “I ultimately think they still want to get campaign, contributions where they can and they’re not going to be very dissuaded from it, no matter which way this case comes out.”
Katkin also regularly attended the trial of former Cincinnati City Councilman P.G. Sittenfeld, who was convicted of one count of bribery and one count of attempted extortion in July. He said both trials focus on the same blurry line between politics and money.
“If politicians make decisions that are arguably both in the interest of the public and in the interest of their contributors, how do we draw the line between which was really motivating their decisions?” Katkin said.
Householder’s attorneys said he supported a $1.3 billion bailout of two nuclear power plants, known as Ohio House Bill 6, because he wanted to save jobs and was opposed to inefficient energy mandates.
Similarly, Borges’ attorneys say he wanted to thwart a referendum to overturn House Bill 6 because he worked as a lobbyist for a school district that would have lost substantial tax revenue if the plants closed.
But that’s not how prosecutors see it.
Assistant U.S. Attorney Emily Glatfelter said in her opening statement that Householder “sold the statehouse” and “ripped off” the people he was elected to serve in a backroom deal to trade power for money.
“If this looks complicated it is — purposely so. This is a way to hide money and make it … difficult to trace,” Glatfelter said, as she outlined a complex alleged scheme to disguise bribe money.
A grand jury indicted Householder and four associates in 2020. They allegedly took $60 million from Akron-based FirstEnergy Corp. and funneled the dark money through a nonprofit, Generation Now, to build a power base for Householder and pass a $1.3 billion bailout for two nuclear plants in what is known as Ohio House Bill 6.
Experts say the entire statehouse is really on trial, along with Householder, because it will expose the inner workings of Ohio politics.
Lobbyist Juan Cespedes and political advisor Jeffrey Longstreth have pleaded guilty and will testify at trial. Columbus lobbyist Neil Clark took his own life a year after his arrest, but prosecutors plan to play recorded conversations of Clark.
FirstEnergy representatives signed a deferred prosecution agreement with prosecutors in July 2021 and agreed to pay a $230 million fine. The public utility holding company admitted it conspired with public officials and others to pay millions in exchange for financially beneficial legislation.
Householder and FirstEnergy associates first began exchanging emails in 2016, Wetzel testified.
At the time, the company's financial position was worsening, testified FirstEnergy vice president and treasurer Steve Staub.
“The company was just bleeding cash,” Staub said, because coal and nuclear plants were not making any money.
Staub testified that several executives involved in the House Bill 6 scandal were fired in 2020, including former president and CEO Chuck Jones, and Mike Dowling, senior vice president of external affairs.
Wetzel spent several hours on the witness stand Tuesday introducing emails, bank records, phone records and dinner reservations that prosecutors are using to weave together the alleged scheme. He is expected to remain on the witness stand at least through Wednesday.
“The complexity of the Householder case is much more significant than what happened with the Sittenfeld case,” said attorney and former city councilman Steve Goodin. “It’s going to be a ton of financial data … this is essentially a financial crime case, and it’s going to play out like how a Medicaid or Medicare fraud trial would play out. And those aren’t very exciting things to sit through.”
